Revolving Loan Fund Portfolio

A critical part of helping to expand entrepreneurship and small business on Maryland’s Eastern Shore is access to capital. Many individuals looking to start or expand a business can find themselves challenged in obtaining traditional financing, such as through banks. For this reason, ESEC administers and manages a portfolio of Revolving Loan Funds (RLF) that helps supply small businesses and entrepreneurs with the nontraditional kind of financing needed to start or expand their business.

2017 Application Deadlines – January 12, February 23, April 06, May 18, June 29, August 10, September 21, November 02.

NOTE: Applications to the Kent County RLF must be received 2 weeks prior to application deadlines to facilitate Kent County’s technical review process

ESEC’s Portfolio of Revolving Loan Funds (RLF) includes a number of funds. Each RLF comes from a different funding source(s) and has different funding objectives and service areas. Please refer to each RLF to determine which coincides with your possible loan request for your business.

Video Lottery Terminal Funds – A portion of the funds from video lottery terminals (slots) located at Maryland’s casinos is deployed to small, minority and women-owned businesses located throughout Maryland. Contact the following VLT Fund Managers directly for information and details.

Angel and Venture Investment Opportunities – Another option for more high-growth and scalable startups are area angel investment and venture capital groups. Each has their own investment priorities and procedures, so contact them individually to express interest and obtain details.

General Eligibility and Application Guidelines for all loan funds in ESEC Portfolio

Application Process

1) Loans to Small and Startup Businesses

Loan amounts of $10,000 to $100,000 (amounts may vary per loan fund)

Priced at or below current market interest rates (i.e. 5% to 7%)

Eligible purposes: business acquisition, commercial real estate acquisition, building improvements, equipment purchase, leasehold improvements, business startup costs, refinancing of existing debt, except refinancing where the lender is in position to take a loss, and working capital

Eligible entities include startups and existing businesses

Use of standard underwriting practices; factors to be considered include repayment capacity, financial strength of the company and guarantors, industry and management experience, and collateral protection

Eligible entities include promising early stage companies to help attract follow-on funding from venture capital firms, angel investors and other sources

Use of standard underwriting practices; factors to be considered include repayment capacity, financial strength of the company and guarantors, industry and management experience, and collateral protection

High potential early stage company with clear path to follow-on funding, particularly engaged in but not limited to aerospace, cybersecurity, energy, life sciences or health IT

Affiliated with a business incubator or coworking space that is a member of the Maryland Business Incubation Association (MBIA) is preferred, but not mandatory
Defendable intellectual property with clear ownership or licensing arrangement

Team led by an experienced entrepreneur or demonstrates willingness to acquire needed management talent

Recognizable $20 million addressable market

Cash flow break-even is reached within 18 months

3) Excluded Transactions and Industries

Financing existing debt where the fund is in position to take a loss

Loans to effect ownership change that will not benefit the business

Loans for the reimbursement of funds owed to an owner or reimbursement of equity injection

Loans for repayment of delinquent state or federal taxes

Non-owner occupied real estate

Firms involved in speculative activities that develop profits from fluctuations rather than the normal course of trade

Seven (7) application deadlines are established at the start of each calendar year for the submission of loan applications.NOTE: Applications to the Kent County RLF must be received 2 weeks prior to application deadlines to facilitate Kent County’s technical review process.

2017 Application Deadlines – January 12, February 23, April 06, May 18, June 29, August 10, September 21, November 02.

Submitted loan applications must be complete and survive a technical review. Based upon loan request, ESEC will make recommendations as to which loan fund within ESEC Portfolio of funds will be used for funding an application.

A $100 Application Fee must accompany all applications.

Any loan applications found to be incomplete are returned to the applicant without consideration. Returned applications may be resubmitted by a future deadline.

Accepted applicants are then scheduled to appear before ESEC’s Loan Review Committee which meets seven (7) times per year, two weeks after application deadline. The Loan Review Committee is made up of regional entrepreneurs, attorneys, financial and marketing professionals, and economic development service providers.

Each interview lasts approximately 45 minutes, allowing 15 minutes for the applicant to make an oral case in support of their application followed by 30 minutes of Q&A by the Loan Review Committee.

Applicants are ordinarily notified within two days as to the Loan Review Committee’s decision.

Approved loans are ordinarily closed within ten (10) days of notification.